Agricultural Opportunities and the U.S.-China Relationship

China’s next leader, Xi Jinping, is set to visit Iowa this week, one of three stops in the U.S. It’s a chance for him to visit old friends from Iowa, but also to take up discussions on agriculture, a pressing issue for China.

In a post last August, I wrote that the limits of production capacity of agriculture in China create a frontier of opportunity for U.S. agriculture. Untapped agricultural production capacity in the U.S., from more abundant natural resources as well as acumen in agricultural technology, can and will play a significant role in meeting the demands of Chinese consumers.

Based on my past trips to China, current work on two case studies about agriculture and agribusiness in China, and preparation for a trip back to China in June, I will offer several considerations related to agriculture and the U.S.-Chinese relationship.

First, U.S.-China ties are important to global peace and prosperity. Despite occasional strains, the ties between the U.S and China have continued to progress in the forty years since President Nixon’s 1972 visit to China. Long-term, it’s difficult to imagine a world that enjoys widespread peace and prosperity where there are not strong ties between the U.S. and China. The economic, agricultural, and geopolitical issues of the future hinge on the relationship between the two countries.

While both countries have an interest in continued development of ties, both sides need to appreciate the many differences between the countries. China’s cultural, social, and geopolitical norms and views are woven through a very long history and one that is quit different from the U.S. U.S. politicians and business people will do better where they have some appreciation for this.

Like a good business, I think both sides need to approach relationships from the perspective of solving problems. The basic question those involved in U.S. agriculture need to ask when forming up ideas about working with the Chinese, is how we are helping them solve their problems. If there is a product, technology, set of knowledge or experience, or relationship that can solve a problem, the Chinese will listen.

In particular, I think the Iowa angle is about solving agricultural productivity problems in China. The center of power in agriculture and the food industry has gravitated toward agricultural production, the capacity to produce more. Iowa is an epicenter of high productivity agriculture, and insofar as our businesses, organizations, and universities can provide solutions to these issues for China, there is a good chance of a mutually beneficial relationship.

Like many countries, food security is a sensitive topic for the Chinese. Food scarcity is still a memory for some in China, and this results in hesitancy to significant increases in food imports and dependency on other countries for food needs. Part of the answer to China’s long-term food needs is likely increased imports of certain commodities and products, but it is also about importing know-how and technology that helps them maximize domestic resources and become part of increasingly interwoven global agricultural supply chains.

Xi Jinping’s trip to Iowa is based on relationships developed in the past with Governor Branstad and with Iowa families. This rightly puts continued relationship building at the center of the visit. In China, it’s not business until it’s personal. Relationships and the trust that flows from them are very, very important. Xi’s visit and the events that surround it will serve as a very important building block for relationships that result in new opportunities for both countries.